Correlation Between DigiAsia Corp and A10 Network

Can any of the company-specific risk be diversified away by investing in both DigiAsia Corp and A10 Network at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DigiAsia Corp and A10 Network into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DigiAsia Corp and A10 Network, you can compare the effects of market volatilities on DigiAsia Corp and A10 Network and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DigiAsia Corp with a short position of A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigiAsia Corp and A10 Network.

Diversification Opportunities for DigiAsia Corp and A10 Network

-0.04

Correlation Coefficient

DigiAsia Corp  A10 Network

Good diversification

The 3 months correlation between DigiAsia and A10 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding DigiAsia Corp and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network and DigiAsia Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DigiAsia Corp are associated (or correlated) with A10 Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Network has no effect on the direction of DigiAsia Corp i.e., DigiAsia Corp and A10 Network go up and down completely randomly.

Pair Corralation between DigiAsia Corp and A10 Network

Given the investment horizon of 90 days DigiAsia Corp is expected to under-perform the A10 Network. In addition to that, DigiAsia Corp is 4.34 times more volatile than A10 Network. It trades about -0.13 of its total potential returns per unit of risk. A10 Network is currently generating about -0.02 per unit of volatility. If you would invest  1,836  in A10 Network on December 28, 2024 and sell it today you would lose (109.00) from holding A10 Network or give up 5.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DigiAsia Corp  vs.  A10 Network

DigiAsia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DigiAsia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

A10 Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days A10 Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, A10 Network is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DigiAsia Corp and A10 Network

The main advantage of trading using opposite DigiAsia Corp and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigiAsia Corp position performs unexpectedly, A10 Network can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in A10 Network will offset losses from the drop in A10 Network's long position.

The idea behind DigiAsia Corp and A10 Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.